MANILA: The Philippine balance of payments is projected to remain under pressure over 2026-2027 amid a challenging global environment and structural constraints, according to the Philippine central bank.
The Bangko Sentral ng Pilipinas (BSP) said in a press release on Tuesday that it projects the current account deficit to widen to around four per cent of the gross domestic product (GDP) from 2026 to 2027, while the balance of payments is expected to remain in deficit at about 1.5-1.6 per cent of GDP.
BSP said after expanding by about 15 per cent in 2025, goods exports are projected to grow more moderately at three per cent in 2026 and four per cent in 2027, reflecting inventory normalisation, weaker global trade momentum and higher trade costs.
It added that the sector will nevertheless benefit from growth in some segments. Electronics exports will continue to be supported by demand for AI-related peripherals, electric vehicle inputs and data centre equipment. Agri-food exports are expected to benefit from sustained demand for coconut products.
However, structural constraints, including high electricity costs, regulatory frictions and logistics bottlenecks, continue to limit supply expansion, according to BSP.
On the import side, the BSP said higher prices are expected to play a dominant role. Goods imports are projected to grow by five to six per cent, largely reflecting the significantly higher oil prices.
Meanwhile, services imports, particularly outbound travel, are projected to continue expanding faster than services exports, adding further pressure on the external balance.
Amid these trade-related pressures, the BSP said non-trade inflows provide a partial offset, although headwinds are emerging.
Information technology and business process management revenues are projected to grow by about four per cent from 2026 to 2027, constrained by skills shortages and the uneven transition toward greater AI exposure.
While some firms are realising productivity gains from AI adoption, the BSP said other firms face transition costs that weigh on near-term growth.
Cash remittances remain a key source of external stability, the BSP added, projecting they will grow by about three per cent over the next two years despite geopolitical tensions, as there are no signs of mass repatriation or widespread deployment bans.
The BSP noted that, overall, the outlook points to an orderly but gradual adjustment, with uncertainty and sentiment pressures transmitted mainly through a price uptick rather than a sharp volume contraction. - Xinhua
